Securitas AB (publ)

Good morning and welcome everyone. Andreas and I are proud to report strong results for Q4 and for the full year 2025. So let us go straight to some of the performance highlights. The organic growth in the quarter was 3% and this was supported by 6% growth in technology and solutions. We had a good finish to the year in technology and solutions with 2% improvement sequentially. And the adjusted organic growth for the group, and that means when you exclude the close down of the SEIS business, was 4%. And now to something important. The operating margin was 8% and 8.2% adjusted in the quarter, thanks to strong delivery across the entire business. North America achieved a 10% operating margin in the quarter, and Europe delivered another quarter with more than 8%. And we have improved the operating margin now 20 quarters in a row and are delivering on the 8% target that we communicated three and a half years ago. EPS real change excluding ISC was also strong at 18%. And we had continued strong delivery in terms of cash flow with operating cash flow of 88% for the full year, and the net debt to EBITDA ratio improved further to 2.1. And based on the stronger underlying performance, the dividend proposal is Swedish kronor 5.30, which represents an 18% increase. And looking at the future, we announced a very important milestone for our journey with the acquisition of Life Raft yesterday evening, This is a leading provider of threat intelligence and I will provide more details regarding the strategic importance of Life Raft at the end of this presentation. So let us then shift to the performance in the business lines and the segments. We deliver strong margin development in both business lines with 12.7% for technology and solutions, 6.6% for services in the quarter. And the real sales growth as I stated in technology and solutions was 6%, so 2% improvement compared to the previous quarter. And the growth in security services was 1% and this growth is obviously negatively impacted by the SEIS business, where we're closing down the government part of that business. So with that, let's move to the segments. And we are starting, as always, with North America, where we're delivering a very strong set of results and a record 10% operating margin in the quarter. And if we start with a growth of 5%, this was driven by good portfolio development and price increases in the Guardian business. and by good development in technology. The real sales growth in technology and solutions improved to 4% compared to lower growth in the previous quarter. And we're looking at the profitability, strong leverage and cost control and guarding together with solid profitability in technology and a recovery in the Pinkton business all contributed to the record level operating margin. So all in all, very strong performance, record-breaking 10%. So well done by our North America team. And we then moved to Europe, where we are also very pleased with the development. The organic growth was 4% in the quarter and the growth was supported by price increases, including impact from the hyperinflationary environment in Turkey and also by solid growth of technology and solutions. while active portfolio management in the services business had a negative impact on the growth. Sales growth in technology and solutions was 7%. But it's the profitability development that stands out, with 110 basis point improvements to 8.1. And the margin improvement was driven by both business lines, including positive impact from the business optimization program. The security services business was positively impacted by high margin on new sales, active portfolio management, and also the divestiture of the airport security business in France. And we also recorded solid improvement in the operating model in the technology and solutions business line, driven by good portfolio development and solid cost control. And as commented earlier, we expect the work we're addressing low margin guarding contracts to be completed during the first half of 2026. So all in all, solid development by our European team and also here an operating margin at a record level. Shifting then to Ibero-America, where we are pleased to report good organic growth and decent margin improvement. The growth was 5% and this was driven by high single-lidded growth in technology and solutions and prices increases in the services business. But similar to Europe, there is a negative impact on the growth from active portfolio management, but we're making good progress here and driving good conversions to technology solutions. And the real sales growth in technology and solutions was 7% in the quarter. The operating margin improved 20 basis points in the quarter, and the improvement was primarily driven by positive impact from active portfolio management in the security services business line. So to conclude, strong delivery in 2025 by our Ibero America team. And looking then at the performance across the group, we are driving disciplined execution of our strategy, and I'm really pleased to see strong execution across all segments. And the client retention is solid at 90%. So with that, turn to the finance update and handing over to you, Andreas.

Thank you, Magnus. And first of all, if I sound different to normal, it is because I'm about to lose my voice. I apologize for that. We start with the income statement where we had organic sales growth of 3% and improved the operating margin with 70 basis points to 8%. It is a strong quarter where we improved our operating income with 15% adjusted for currency. As we communicated in Q2, we have introduced two new KPIs which are adjusting our organic growth and our operating margin for the government business to be closed down within SEIS. In the quarter, the adjusted organic growth was 4% and the adjusted operating margin was 8.2%. Looking below operating results there are no material developments in amortization of acquisition related intangibles nor in the acquisition related costs. The items affecting comparability was 78 million and this was related to the ongoing European transformation and business optimization programs. And the full year cost for these programs was 382 million approximately in line with our previous guidance. We have executed the business optimization program in a good way where the annualized savings in Q4 are in line with the targeted 200 million savings. The business optimization program is now closed and in 2026 the only remaining program is related to the European transformation. And here we estimate to have a full year 2026 program cost of 225 to 250 million. A material reduction compared to the 382 million related to the programs in 2025. In Q3, we took a 1.5 billion cost in items affecting comparability related to the close down of the government business within SEIS. The close down is progressing according to plan and had limited impact on our operating result in Q4. We continue to expect the vast majority of the business to be closed down by the end of 2026 and we will also start to see an accelerated execution of the close down during the first half year. Our finance net came in at 383 million, a reduction of 146 million compared to last year, and here we continue to see a positive trend of reduced financing costs as interest rates and our debt levels are going down. For the full year 2026, we estimate the finance net to continue to reduce and land around 1.6 billion, to be compared to the 1.8 billion for the full year 2025. Moving to tax, here we had a tax rate of 29.5% for the full year, slightly higher than our Q3 forecast of 29.2%. The full year tax rate was impacted by the SEIS closed down cost in Q3, where we estimate around half of the cost to be tax deductible over time. Adjusted for the closed down impact, the full year tax rate was 27.2% and we expect the 2026 tax rate to be in the approximately same area. All in all, we have a strong quarter where we grow our FX adjusted EPS with 18% and as we summarized 2025, We have improved our adjusted operating margin with 60 basis points to 7.7%, grown our operating result with 11% and grown our EPS with 18%. And at the same time, we also achieved our financial target of an operating margin of 8% the second half year of 2025. The adjusted operating margin in the second half was 8.2%. We then moved to cash flow, where our operating cash flow was solid at 3.9 billion or 128% of operating income. The cash flow was supported by low growth rates and a continued improved DSO, but also negatively impacted by the additional 44 million US dollar payroll in our US guarding business as we communicated in the third quarter. This negative impact is a timing impact only, which occurs every fifth to sixth year. The free cash flow landed at 3 billion, supported then by the solid operating cash flow, reduced interest payments due to the lower interest rates and debt levels, and positive tax timing impacts. Looking at the full year 2025, we deliver another year of record cash flow. The operating cash flow was more than 10 billion, or 88% of the result, supported by good working capital focus and low growth rates. And we have now delivered operating cash flows above our financial targets of 70 to 80% over the last two years, a result of our strong focus to build a more qualitative business and also structurally improve our working capital over time. And this has of course also translated into stronger free cash flows, which creates increased flexibility and opportunity for us as we move into a new phase of our strategic journey. Our cash generation will also be positively impacted as our items affecting comparability continues to reduce as we go into 2026 and beyond. We then have a look at our net debt, which was 31.3 billion at the end of the quarter. This is a reduction of 2.1 billion compared to Q3, mainly supported by the strong free cash flow, but also by the strength in Swedish krona. In the quarter, we paid the second tranche of our dividend and we had 321 million of total IEC payments, whereof approximately 160 million was related to the final payment for the US government and Paragon settlement. We have now made all three payments related to this settlement and expect no further cash flow out related to the case. Looking at the right hand side, our net debt to EBITDA reduced to 2.1. This is an 0.4 times improvement compared to Q4 last year, where positive EBITDA development, good cash generation and the strength in Swedish krona have supported positively. And we are well below our target net debt to EBITDA of less than three times. Moving on to have a look at our financing and financial position. where we continue to have a strong balance sheet, remain with strong liquidity, and we have no financial covenants in our debt facilities. After a period of important refinancing focus, our main focus during the second half of 2025 has been to amortize debt supported by the strong free cash flow generation. In the quarter, we repaid 1.9 billion of debt, and throughout 2025, we have amortized a total of 3.3 billion. This continues to support our cost of financing going forward, and looking at the maturity chart, we have very limited refinancing needs throughout 2026. And as always, we remain committed to our investment grade rating. So with that, I hand over back to you, Magnus.

Many thanks, Andreas. So I'd like to share a few perspectives regarding our strategic development and the Life Raft acquisition before we open up the Q&A. First, we are proud over the fact that we are reaching our 8% target in the second half of 2025. Back in 2022, when we did the Stanley acquisition, we accelerated the work to change the profile of Securitas, create the company with the strongest technology and digital offering, to our clients in combination with high quality guarding services. And when looking back at the last four years, we have been executing well. We are a sharper, more focused company today and operating at a different margin level. And as we're entering 2026, this also means that we can then start to retire this bridge that we have kept coming back to every quarter and over the last three and a half years. But looking at the future, we're very excited about the acquisition of Life Raft. So when I look at the transformation of Securitas during the last six, seven years, we have kept a clear focus on investing in the core capabilities that we consider critical to winning in this industry. And those are focused on presence, technology and data. And in this context, we strengthen our guarding value proposition. We have improved the profitability of guarding. We have built a globally leading technology position and a more modern and digitally capable business. So we have strong pillars in our business today. But we have also worked to meet the increasing client demand for better understanding the risks and the threats facing their business. And over the past five years, we have developed in-house risk intelligence capabilities that we are providing to more and more customers. So all this is good, you might say, but what is then the importance of the Life Raft acquisition? Well, Life Raft is one of the leading SaaS-based threat intelligence providers focused on OSINT, and that's open source intelligence. This is a very strong team with deep expertise in threat intelligence, and they have been a partner and provider to Securitas for many years. And with Life Raft, we will be able to scale and leverage their capabilities across our client base and in the process strengthen our client value proposition. When looking at the financials, the company is currently prioritizing rapid expansion and growing organically around 30% on an annual basis, but also then reinvesting very strong growth margins to accelerate organic growth. And given the increase in demand in this market, I fully support this approach. And the acquisition is fully in line with our strategy to create a more scalable business model and becomes an important addition to accelerate growth in high margin recurring monthly revenue. And as previously stated, the recurring monthly revenue for the group exceeds more than 1 billion SEK. So we are thrilled to welcome the Life Raft team when we are closing the transaction, joining forces to shape the future with more intelligence-led security. And the future is promising. With the transformation of Securitas, we are well positioned with a clearly differentiated client offering, well positioned for profitable growth. And we are operating in an attractive market, but also a growing market where we see steady increase in the demand for quality security. We have transformed and repositioned our client portfolio with a clear focus on segments with more sophisticated security needs and higher growth profile. And we partner with our clients for the long term. And we see that our deeper engagement model, where we leverage our technology and digital capabilities, is generating higher value for our clients and also for us. And the approach is working. So like Andreas and I have commented, we're executing well in our plans, 20 consecutive quarters of operating margin improvement and solid cash flow generation. And we've had a clear focus on enhancing the quality of our business and margin improvement in recent years. But as more and more units reach the required profitability thresholds, so from my perspective, that means for a good sustainable business, they also gain the right to shift focus to profitable growth. And with the business now in much better shape, we can shift emphasis towards commercial synergies and driving growth. And as stated many times, we do this with a clear focus on building a more scalable business. So we are confident and excited about our longer-term opportunities and we are looking forward to sharing more in the Capital Markets Day in June. So in conclusion, we are on the right path, well positioned for the next phase. So with that, we conclude the Q4 presentation and happy to open up the Q&A.